House to consider Etheridge's ideas

scharrison,
Just because the beginning of "more freely" traded oil futures corresponds (according to you, at least) with the rise in gas prices doesn't mean that trading in oil futures has CAUSED higher gas prices. Correlation isn't causation. You've yet to show the link how speculation would lead to higher prices.

Beginning in 2001, ownership of iPods skyrocketed, along with the price of fuel. Is higher ownership of iPods to blame for our current level of gas prices?

Please re-read my post below. If we make a bet on the future level of gas prices, how does that affect current prices? Until you can answer that, you can't explain how speculation is leading to higher prices.

I'm sorry if it sounds like I'm picking on you. 9 times out of 10, you're the smartest commenter on this site. However, this is one of the rare occasions where you're simply wrong on the issues. I urge you to read Krugman's take on this.

Okay, let's look at a couple of factors that many readers here aren't aware of:

Since WWII, aside from a spike in per barrel price during the 1974 Oil Crisis, the average per barrel price hovered around $19.00 (in 2007 dollars). That is, until the Republican Congress in 2001 allowed speculators to (more freely) trade oil futures. Now, they didn't really get busy until late 2003/early 2004, because OPEC was dealing with an overproduction problem post 9/11. But traders have been going crazy since 2004, leading up to:

currently, according to OPEC's Secretary General Abdullah al-Badri, actual demand for oil is about 87 million barrels per day, but the "paper demand" (speculator-held contracts) is 1.36 billion barrels per day, or fifteen times the actual market demand. This continued "false demand" is going to accomplish two things: it will keep the price of oil much higher than it should be, and it will also (due to fluctuations) end up causing American fund investors to lose a boatload of money just like the sub-prime fiasco.

So (once again) we're going to lose going and coming.

scharrison, the fact that gas stations aren't having trouble getting gasoline is a pretty good indication that speculation has NOTHING to do with the rise in gas prices.

Think about it this way: I bet you that in one year's time, the price of gas will be greater than $5. Does our bet affect the price of gas at all? No.

Our bet would affect the price of gas only if producers decided to horde gas, thinking that they might be able to sell gas at a higher price in the future. But we haven't seen this. There has been no increase in inventories, and no indication that the rate of extraction has decreased. Refineries continue to operate at capacity.

If you don't believe me (after all, I'm just some d-bag going by the name of 'dahedgehog' for crissakes!), please consult Paul Krugman: http://www.princeton.edu/~pkrugman/Speculation%20and%20Signatures.pdf

I'm quite familiar with only making a few pennies off a product unit and having that little bit of profit disappear when some unforeseen cost pops up. In their (the gas stations) case, it could be something as simple as rising fuel costs for the trucks that bring the fuel, or people using their credit cards more (extra fees) because they don't have enough cash to pay for the $4.00 a gallon gas.

But that wasn't my point. I wasn't talking about gas stations making money, I was talking about how they always have gas in stock. Meaning, there's nothing wrong with the volume of (current) supplies. Everybody's got plenty of gas to sell.

You should at least break the cookie in half and give me the smaller piece.

Here is my question to the socialist, have you ever run anything? Gas station owners don't make anything off of gas, if you can figure why I'll give you a cookie.

"Prices are nothing more than an indication of the supply and demand for a given resource."

"Good grief; speculation is certainly not the problem."

I have a simple question for you free market lovers: when is the last time you had to drive past a gas station because they were out of gas? If there was a supply problem, there would be intermittent disruptions in availability. There aren't, and there was precious little availability problemms even during the Katrina/Rita disasters.

There are two things driving (and keeping) the price of gas up right now: speculation and the fear/uncertainty of future supplies. And the latter is (at least partially) a result of speculators manipulating the media.

Representative Miller-D, Representative Bob Etheridge-D, and Representative David Price-D are three of the Democratic congressmen who are part of the do-nothing Congress this year.

Since Bill Clinton vetoed our ability to explore and drill on the 1 million or so acres that were set aside in ANWR. We have been caught in a downward spiral of access to American natural resources. The Democrats have done NOTHING to make a major impact in the energy supply arena and have used environmental hysteria to tamp down on American industry.
Democrats will continue to do nothing because they believe that we Americans are dumb enough to believe that the Democrats will fix the situation after the elections.

Here in North Carolina and nationally if you place these same Democrats back in office, you will continue to have the same economic and energy problems we have now. And we certainly do not need another FOUR YEARS of Perdue-Easley disasters.

Good grief; speculation is certainly not the problem. It's just another symptom of the problem, not the cause.

Free markets will regulate this without government intervention as they always do. The real way to lower fuel costs is for the government to get the heck out of the way and allow more exploration, recovery, and refining anywhere as far as I am concerned. Dems don't really want lower fuel costs however, as their ultimate goal is socialism and reduction of our freedom to travel where, when and how we choose. Oil/gas industry provides fantastic jobs; why is Etheridge against this in NC? If he is against energy speculation, how about ending real estate speculation that has driven up the cost of housing by 100% in Cary since I moved here in 1996, despite recent slowing of the market? Government intervention in free markets, which includes speculation, always results in unintended consequences and greater costs to consumers. Prices are nothing more than an indication of the supply and demand for a given resource. Higher prices leads to more exploration, leading to greater supply and lower prices. It always works. Guess Mr. Etheridge skipped ECON 101 in college.